Wednesday, July 2, 2008

Is the debate on Best of Breed vs ERP or is it on Functionality vs. Integration?


Almost everyone has an opinion on the question of best of breed vs ERP. Alas, not many have the answers.
SAP and other big ERP players have this habit of browbeating the best of breed competition .SAP had once famously talked about the perils of buying best of breed .Well, the logic put by the ERP players is that integration is always an issue with best of breed software. But then, I am at a loss as to why the best of breed vendors have never hit back on their strong point of functionality. In terms of functionality, best of breed would win hands down.
So which is better, best of breed or ERP, which people have termed as best of suite. There are no clear winners and there are no clear answers. There is ample space for both for many more years. The criteria which normally hold the key are functionality, integration, implementation and technology. Price comes at the last which does suggest that this is an extremely profitable domain. Functionality and integration have the same priority on the wish-list of buyers.
But beware! Lots of buyers are opting for ERP and their decision is based on the presumption that they have the incumbent ERP installed and hence it’s the natural choice. Not necessarily a correct decision. The incumbent ERP may not have the requisite functionality ,required by the customers business, packed in it. If the customer just wants the industry standard process ,maybe a vague example could be inventory management module and normal functionality, they can very well opt for their current ERP. But if their functionality is rapidly changing, they need to look further and here the balance tilts in favour of best of breed.
Best of breed SCM software vendors are investing a lot in technology as well as adding more and more functionality to their base product. With most shifting to SOA(Service Oriented Architecture) , ERP vendors won’t have any grounds to complain about integration.
In SCM, business runs technology and not vice-versa. Its time for the ERPs to come up with their own best of breed versions.

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